I
have been looking forward to this Development Forum
being held in our historic port city of Galle. Two years
ago, this city and several other areas of Sri Lanka
were damaged by the Tsunami. We take modest pride in
the fact that this city and other areas so affected
have now returned to near normalcy and that we have
been able to hold this forum in this city with the participation
of our development partners. The same speed
of recovery that we are witnessing in the south could
have been seen in the North and East as well, and we
could have probably organized this forum in Trincomalee,
if not for the violence and terrorist activities of
the LTTE. Nevertheless, on the whole, the country has
made satisfactory progress in the Tsunami recovery process
and has been able to utilize a substantial amount of
assistance extended by our development partners.
The document placed before you which
has been prepared by the Ministry of
Finance and Planning in consultation with donor representatives
and other
stakeholders, amply demonstrates the progress as well
as complexities and
challenges in this recovery process. Let me at the very
outset, extend my
sincere appreciation to the international community
and multilateral
agencies for their assistance in the post-Tsunami recovery
process without
which we could not have recovered so rapidly.
This is the first Development Forum
under my chairmanship as Minister of
Finance and Planning and also under my Presidency. This
forum is of utmost
importance to my country's future development. At the
last Presidential
Election, I received a mandate to implement the "Mahinda
Chinthana" - A
Vision towards a new Sri Lanka.
During the first year of administration,
my Government translated this
overall vision in to action. As you may be aware, I
presented the "Mahinda
Chinthana - the Ten Year Horizon, Development Framework
2006 -2016" together
with the 2007 Budget, outlining the future directions,
strategies and
objectives of our Government. The commitment to fulfill
the objectives of
this 10 year horizon is a pledge to achieve the Millennium
Development Goals. That is to eradicate poverty on a
sustainable basis. Therefore, I have no doubt that this
development Forum will focus on the "Mahinda Chinthana
- The 10 Year Horizon" towards a new Sri Lanka.
During the first year of my administration,
which is also the first year of the decade committed
to realize the Millennium Development Goals, our country
was confronted with many challenges. Unprecedented rise
in oil prices caused a severe burden on our economy
and in turn on our people. Our nation spent around 2
billion US Dollars in 2006 to finance oil imports -
three times higher 2 than what it was prior to the Tsunami.
We reverted to debt servicing after one year of debt
relief in 2005. We faced immense
challenges in the recovery process from the Tsunami.
- the worst ever natural disaster that shattered our
nation. In addition, global competition subjected our
export industry to a painful transition process, with
several factories becoming extremely vulnerable and
struggling for survival.
Non-cooperation by the LTTE to participate
in the negotiation process and
their refusal to allow other democratic parties to function,
prolonged the
conflict interrupting some of the development activities
in the Northern and
Eastern provinces. The deliberate escalation of terrorist
attacks on
innocent civilians, public property and security forces,
caused disruption
and led to increased spending. Our deterrent military
actions against
terrorism to liberate the people from humanitarian burdens
created by the L
TTE, has increased demand for funds for relief and resettlement
programmes.
We have also gone through a year of natural disturbances;
heavy rains,
floods and earth slips which caused loss of income and
disrupted the
day-to-day life of our people. These challenges reflect
the hard political
economic reality that we have to deal with.
Against all these challenges and
complexities in our political economy, our
Government sustained an economic growth in excess of
7 percent during 2006 -
a further improvement from the growth of 6.2 percent
in 2005. Unemployment
declined to 6 percent. We have seen an export growth
of around 8 percent. We
have attracted overseas remittances of over 2 billion
US Dollars. We managed
to attract foreign investment in excess of 500 million
US Dollars - twice
the level of annual FDIs in our country. Income from
tourism exceeded 400
million US Dollars.
Government revenue raised in excess
of 16 percent of GDP and public
investment increased by 6 percent. Inflows of official
development
assistance exceeded 1 billion US Dollars, also recording
the highest ever
utilization. We contained the Budget deficit to below
8 percent of GDP.
Public debt as well as debt service indicators further
improved. As
targeted, our foreign reserves remained at around 2.5
billion US Dollars.
New commitments of assistance by the international community
also exceeded 1
billion US Dollars during 2006. In response to the inflationary
pressures
that built up in the economy during 2006, we tightened
our monetary and
financial policies to stabilize the economy. These gains
demonstrate the
resilience of our economy and people and our success
in managing complex
economic and political challenges.
We give high priority to a nation-wide
infrastructure network to accelerate
growth in lagging regions. In this context, accelerated
development in
electricity, irrigation, transport, seaports and airports,
and urban
amenities have been identified as key priorities under
"Randora" - the
Government's infrastructure development strategy. We
have been able to
progress on the long-delayed Upper Kotmale Hydro Power
Plant, the Puttalam
and Trincomalee Coal Power Projects, Kerawalapitiya
Power Plant, Colombo
South Port, a new international airport, national road
projects, Moragahakanda Irrigation Scheme and several
other irrigation and water supply schemes. We are working
very closely with our development partners for an early
completion of a four-lane Southern Expressway, an industrial
port at Hambantota, Greater Colombo Outer-circular Expressway
with several townships and Investment Zones in Trincomalee
and Hambantota.
I have also requested assistance
from the World Bank and the ADB to develop
the Northern Expressway, linking the North and South
to create greater
connectivity in support of the peace building process.
I take this opportunity to thank our development partners
who helped to build the Jaffna and Trincomalee Court
complexes, the Jaffna Teaching Hospital and water supply
scheme, Mannar, Manampitiya and Arugambay bridges, housing,
roads and irrigation schemes in the Northern and Eastern
provinces. Economic development is the surest way to
revive these areas and provide
meaningful opportunities to people in such areas, who
have suffered enough.
Development will not be wholesome
or sustainable unless it is associated
with a value system, respect for human rights and democracy,
the culture and
heritage. Therefore, our rural development programmed
is essentially an
initiative to empower the community itself in the planning
and development
process at grassroots level. This will also facilitate
and promote public
accountability, transparency and local ownership in
development. We need to
ensure that overall development will be pro-poor but
at the same time
pro-growth. Placing emphasis on roads, electricity,
irrigation and water
supply, housing, and livelihood assistance, we have
launched the "Jathika
Saviya-Gama Naguma" - country's rural development
initiative within a
medium-term development framework aimed at addressing
problems in lagging
regions.
My Government also places equal importance
on promoting a knowledge economy
to accelerate our future development. Having achieved
notable successes in
our Human Resource Index, Sri Lanka is looking towards
a brighter future by building its economy based on productivity,
skills, knowledge and technology. Accordingly, we have
continued to maintain our commitment and reoriented
our policies as well as
the limited resources towards further improving education
and health
services. In doing so, my aim is to take technology
to villages. In this
context, "Nana Sala" - an initiative to popularize
computer access and my
new initiative to create e-villages are designed to
promote access to information to those living in distant
locations.
Our country has long endeavoured
to find a democratic solution to harmonize
the needs of different communities. It has a long history.
Several democratic solutions have been attempted by
successive Governments since Independence. However,
such attempts have not succeeded in providing an acceptable
solution mainly to ethnic and power sharing issues.
All democratic parties in Sri Lanka and the international
community agree that terrorism is not the answer to
this situation and the way to find a lasting solution.
Our country has suffered heavily
from terrorism. It is encouraging to note
the global recognition of the cost of terrorism, more
seriously than in the
80's. We as a country therefore work hand-in-hand with
the global community
to deal with terrorism by addressing its root causes
through political
negotiations and constitutional solutions as well as
by counteracting
senseless terrorist violence on innocent people and
national assets. Our aim
in defeating terrorism is to liberate the peoples who
have become victims of terrorism. In such a liberation
excise, we are committed to ensure that human rights
are
preserved and democracy is respected.
We consider development in liberated
regions and in rest of the North and
East as critical in promoting sustainable peace and
finding meaningful
solutions to many potential conflicts within multi-ethnic
and
multi-religious societies. I have no doubt that our
development partners
will therefore separate terrorism from a conflict in
a complex multicultural
society with many income and regional disparities. I
also hope that our
"Gama Naguma" initiative focusing the grassroots
level will be a solid
foundation to empower community. I therefore, seek the
fullest cooperation
from our development partners in our sincere commitment
to build a New Sri
Lanka: based on the "Mahinda Chinthana" -
the Ten Year Horizon and to
achieve the Millennium Development Goals, well in advance.
Thank you.
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